Declining dollar a boon to exporters, pain for importers

The dollar is continuing to lose value in the world market, and mid-Michigan businesses exporting and importing wares from foreign lands are feeling the effect.

"Prices are going through the roof, and it's affecting everything," said Jim A. Hayes Jr., vice president of Hayes Specialties Corp., wholesaler of novelties, toys and gifts with headquarters at 1761 E. Genesee in Saginaw. Hayes Specialties imports much of its products from China and exports to Canada and countries in Europe and South America.

Dana Rieber | The Saginaw NewsDaniel M. Groening, 21, of Saginaw moves wood pallets in the warehouse of
Hayes Specialties Corporation which imports and exports toys and novelties from around the globe.

"We're getting double-hit because the fuel costs raise transportation costs and hit the consumer," Hayes said. "It's only going to get worse as prices get higher and higher. Our goods just don't compete with American-produced goods."

Despite this, Hayes is quick to address his company's support of American workers.

"We support many, many American jobs," he said. "Our goods are handled by U.S. workers -- UPS drivers, teamster truckers and Union longshoremen, jobs that wouldn't be there without us."

The value of the dollar is falling against other currencies in part because America imports more than it sells abroad -- especially oil -- and must borrow to close the gap, reports MSN Money. Downsides include pain at the gas pump, more costly travel abroad and more expensive imported goods, from luxury cars to shoes.

But there are upsides, as well, for U.S. exporters.

Dow Chemical Co. Midland is preventing the fallout from settling on its importing-exporting enterprises.

"The impact of currency fluctuation on Dow is relatively modest due to our global presence," said David Winder, who handles corporate media relations for Dow. "We have plants and people in many countries around the world, and they mostly serve the regions in which they sit. Today, more than two-thirds of Dow's sales generate out of North America, and U.S. facilities are focused on meeting domestic demand."

The falling dollar is not necessarily a one-sided blow.

"Whenever the dollar falls, it makes exporting less expensive," said George M. Puia, Dow Chemical Co. Centennial Chair in Global Business at Saginaw Valley State University, who has a doctorate in corporate strategy. "It helps in selling more goods abroad."

"Dow Corning is a global company with more than 60 percent of sales outside the U.S.," spokesman Jarrod Erpelding said.

"Because we have more revenue than expenses in non-U.S. currencies, we are not as susceptible to fluctuations in the U.S. dollar. In some respects, when certain foreign currencies are stronger, that can have a positive impact on Dow Corning earnings."

Puia also noted the declining dollar leads to more foreign tourists visiting our shores. Michigan, in Puia's estimation, is poised to benefit from the tourism influx because of the state's natural resources.

"Traveling to the U.S. is 25 percent cheaper than it was two years ago," he said.

A the falling dollar makes importing more expensive, Puia said, it can lead to import substitution -- the increased buying of American-made products over those imported from overseas, such as machinery and other expensive goods.

Dana Rieber | The Saginaw NewsHayes Specialties Corporation imports and exports toys and novelties from around the globe.

The dollar's ideal status is "low but stable," Puia said, keeping exporting inexpensive and importing less likely to fluctuate.

The dollar's value succumbed to a low today. One euro, the currency that 15 nations share, was worth $1.55295 in U.S. dollars. A dollar equaled 99.16326 Japanese yen. Last week, the dollar slipped below parity with the Swiss franc for the first time and remains there.